>> yeah okay. not trying to redo the white house, which is the first thing i thought of. >> me, too. >> episode of "extreme makeover home edition." she's going to help build a boarding house in north carolina for homeless women veterans. an issue that's gotten so much attention. she's going to be out on thursday to work on the house in fayetteville, north carolina. >> and apparently several families live in it once it's finished. >> fantastic. we'll have to report on that in the political pop next time. joe johns, thanks as always. now to my friend wolf blitzer. "the situation room" starts right now. >> brooke, thanks very much. happening now, president obama meets with house republican leaders this hour in a last-minute push to prevent a national debt disaster. we'll read the fine print of a bipartisan compromise getting lots of attention right now. new political fireworks over phone hacking. the british prime minister gets hammered. and the fbi is now moving forward with its investigation

right here in the united states. and a war of words between two florida lawmakers. democratic party chairwoman debbie wasserman-shultz joins me to respond to a congressman's rant calling her vile, unprofessional and despicable. i'm wolf blitzer. you're in "the situation room." right now, six u.s. senators are giving new momentum to talks aiming at avoiding a national catastrophe in the united states. their bipartisan compromise to slash the deficit. only 12 dpas left, president obama is due to meet this hour with house speaker john boehner and majority leader eric cantor. this just a short while after he met with top congressional democrats over at the white house. ours who correspondent dan

lothian is standing by. kate baldwin has the latest. kate? >> polling show that americans are looking for compromise to get through this debt crisis. senators in the gang of six say that's exactly what they're offering here with their plan, but there are real questions if they can get enough support in time. now after months of negotiations. the so-called gang of six met once again behind closed doors this time to try to build momentum around their $3.7 trillion debt reduction plan. >> this is the only bipartisan plan that meets the debt reduction targets. >> the proposal would have budget sate h savings of $500 million. -- $500 billion. also it calls for big changes to medicare and social security. >> i think at the end of the day, what the overwhelming majority of americans are saying, fix this. and if it takes a little

compromise from both. >> but the is plan faces a harsh reality. tough procedural obstacles means the proposal won't be ready ahead of the august 2 debt ceiling deadline. and a key block of conservatives is already saying no way. >> we know it's going to hurt job creation. we know it's bad for small businesses. we're not going to go for this type of plan. >> with time running out, harry reid, who is still work on a fall back plan with mitch mcconnell says he's now waiting for a signal from house gop leaders. >> we have a plan to go forward over here, but until we hear from the house of representatives, we really are -- all of our work here would be for not. >> now there is also talk of folding elements of the gang of six plan into this so-called fallback plan being worked out between senators reid and senator mitch mcconnell. but it's not even clear at this point, wolf, if there's enough

votes for even that last-ditch plan to pass the house. at this point. >> yeah, there's a lot of uncertainty. kate baldwin, thanks very much. let's go to the white house. dan lothian is standing by. what is the president's latest stance right now. we've seen a little shifting on delaying -- having a stop gap measure to at least give this more time after the august 2 deadline. >> well, they still think this gang of six proposal is overall an approach that they can accept, and while some republicans see the enthusiastic embrace by this white house as a strategy to overshadow cut, cap and balance, one senior administration official tells me that's simply not the case. the only strategy here is about finding a solution that's good for the economy. >> it wasn't an outright endorsement, but president obama could hardly contain his enthusiasm tuesday for deficit reduction proposal from the bipartisan gang of six opini opinion -- six.

>> the frame work is broadly consistent with what we've been working on at the white house. >> a delater with more details in hand, jay carney continueded to praise the proposal even if the white house, he said, might not agree with everything in it. >> that is a significant deal and it's worth being enthusiastic about. >> but when some republicans heard that strong endorsement, it fuelled more skepticism. conservatives on twitter -- >> they came up with the debt compromise plan they all figured they would come up with. let's take it seriously. then the president came out and said let's take it seriously. the president endorsed it and then they think it's an awful plan. >> some republican aides on the hill say the president's strong endorsement did more harm than good because he also called the proposal consistent with his own approach and touted the revenue or tax increases. but some democrats aren't happy either, pushing back, unwilling

to accept cuts to entitlement programs like social security and medicare. >> we are trying to suppress the growth. we don't think it's healthy for washington. the afl/cio said there's no shared sacrifice here. the only sacred cows being gored are working people, the middle class, senior and the poor. no uh some democrats were very careful about weighing in, saying that they still need to see some of the details before they'll decide whether or not it's something they can embrace. as for white house enthusiastic reaction, jessica yellin asked today, if in hindsight they had any second thoughts about how they reacted, and he said, quote, absolutely not. >> thanks very much. much more on this story coming up. jeff cafferty has the cafferty file. jack?

>> in an economy with 9.2% unemployment, job security is a little tough to come by. that is unless you work for the federal government. an analysis done by "usa today" found that job security for government employees at many federal agencies last year was more than 99%. and these workers are more likely to die than they are to lose their jobs due to a layoff or a firing. the federal government only fired about 1/2 of 1% of its work force last year. the private sector by contrast fires about 3% of its workers every year for performance issues. here are a few examples. at the small business administration, they employ 4,000 people. six were fired last year. there were no layoffs. 17 employees died. not a single federal attorney was laid off last year. we have about 35,000 of those. just 27 were fired, 33 died. both the federal trade

commission and federal communications commission, not a single employee was fired or laid off last year. the "usa today" analysis also found that nearly 3 out of 5 firings among federal workers occurred within the first two years on the job. most commonly to those who are paid the lowest. meanwhile, the nearly 500,000 federal employees who earn more than $100,000 a year, they had job security of more than -- write this one down -- job security of more than 99.8%. nice work if you can get it. here's the question -- what does it mean that federal workers are more likely to die than lose their jobs? go to cnn.com/caffertyfile and post a comment on my blog. wolf? >> jack cafferty, thank you. disturbing new evidence that u.s. taxpayer money may be winding up in the hands of extremists and terrorists who are killing u.s. troops in afghanistan.

this is the story that's just coming in. and how much are house democrats willing to give to raise the debt limit? i'll ask the democratic party chairwoman about possible cut. she's walk into "the situation room" right now. congresswoman, stand by.

the clock is ticking towards a possible default of the nation's debt. the democratic party chair in the congress certainly has a lot op her plate right now with the debt crisis. everything else, as well as a very, very strong verbal showdown with a republican colleague of hers from florida. she's here in the situation room. congressman, thanks very much for coming in. let's talk about substance first and then you can talk about this riff you have with this congressman. the gang of six is out with a plan. the president warmly embracing it, even though there are cuts in medicare for the elderly included. is this something you can live

with? >> well, i think the really good and big news out of that gang of six is prose sal is that there are finally republicans, particularly in the senate that recognize that default would be cataclysmic and we need to avoid that at any cost and we need to make sure that we have a deal that can be embraced as prodly by as many members of both houses as we can. >> if there are cuts in medicare, social security, could you embrace it? >> i haven't seen the details of the plan or know how it impacts medicare, but i do think it's important to note that the democrats have put all of our sacred cows on the table, that we're willing to consider items that will preserve the long-term medicare or social security without impacting or harming seniors. >> one of the pro-proposals is what the president has called means testing for medicare recipients. yor in other words, richer elderly

people would have to pay more than middle class or poor recipients. is that something you can live with? >> well, i think we need -- i'm not prepared to commit to any specific proposal, but we are willing to put all of our sacred cows on the table to make sure that we can get a big solution to a big problem. and there are a lot of things that we' placed on the table as an option. it would be wonderful if we had the republicans go on the table and put their sacred cows on the table. >> some of the republicans have done it. some of your liberal democrats in the house can't accept this gang of six proposals precisely because it deals with entitlements, social security, medicare, medicare. and they will never vote for it. and so you rear the chair. you have a tough position. you've got to get the conservative democrats, the liberal democrats. you're also a member of congress. what will you do if it comes down to a deal that the president wants, supporting the gang of six legislation and you

have a lott of seniors in your district in south florida. >> making sure we protect seniors from being gravely harmed by changes to medicare is a goal of all democrats including the president. and i know that long-term making sure that we can get a big solution to a big problem is going to be important. and like i said, that's why we've put everything on the table and we need the republicans in the house to join froem and congressional democrats so we can work out what everyone can agree on. >> i'm wondering if you're open to adjusting the cost of living increase for social security, medicare, so that the seniors who are getting a regular cost of living increase, it will be lower in the years to come. >> when it comes to including entitlements in any deal, there

feeds to be some balance. there needs to be shared sacrifice. the president and congressional democrats are looking for that balance. and we could look at those sacred cows if the republicans are putting theirs on the table, but so far, at least on the house side, there hasn't been any inclination to do that. >> but if the republicans were willing that, at least the republicans in the gang of six, like tom coburn and others, if they were willing to increase taxes, you would be willing to deal with entitlement cuts. >> accomplishing a big deal with everything on the table would be possible with that shared sacrifice. i don't see how it's possible without it. >> you were on the house floor and you said this, and i'll play the clip of what you said. >> incredulously, the gentleman from florida who represents thousands of medicare

beneficiaries, as do i supports this plan, unbelievable to a member from south florida. >> he sent a letter to you and copied the republican leadership. he said look, debbie, i understand after i departed the house floor, you directed your floor speech comments directly towards me. let me make myself perfectly clear, you want a personal fight. i'm happy to oblige. you are the most vile, unprofessional and despicable member of the united states house of representatives. if you have something to say to me, stop being a coward and say it to myself. otherwise shut the heck up, focus on your own congressional district. that's not all he says. he goes on. i am bringing your actions today to our majority leader and majority whip and from this time forward, understand that i shall defend myself forthright against your heinous characterless behavior which dates back to the disgusting protest you ordered

at my campaign headquarters october 2010 in deerfield beach. you have proven repeatedly you are not a lady and therefore shall not be afforded due respect from me. wow. have you ever been attacked publicly like that? >> no. and i was surprised that he sent that to my personal e-mail, an e-mail that he didn't previously have. but it's -- you know, it doesn't faze me. it isn't surprising he would react to the probably untold pressure he's getting from his constituents. i mean, he and i boat represent, as i pointed out in debate on the house floor, represent thousands of senior citizens who under this cut, cap and balance really, duck dodge and dismaptle plan the republicans have proposed would face huge increases in their medicare costs. it would end medicare as we know it. it's the ryan plan on steroids.

and he clearly is feeling the pressure. if he can't handle that pressure, can't handle being called out in debate on the house floor, then he probably should change his position. you know, he also suggested that i focus on my own congressional distri district. i'll point out that i was, he's a constituent of mine. and so i was dutifully doing my job and representing my constituents and taking to task someone who i think is really taking the wrong position when it comes to the people we represent in south florida who badly need that safety net. we fe that we won't dramatically raise their costs. . >> relives he lives in your disf not his own? >> yes, he lives in my dris dis trikt. >> there's reports that he called you and apologized. is that true? >> that is not true.

i haven't received an e-mail or a voice mail. >> he's quoted in this roll call as having told a reporter, i just apologized. >> that's simply not true. >> adds of this moment, he's not called you or communicated -- he has not apologized? >> no, he has not. >> if he does call you and say i'm sorry, what will you say? >> well, i would appreciate his apology. and i would hope that he would reconsider his ill advised position on increasing benefit -- increasing costs for medicare beneficiaries, but i think he really needs to understand when we're debating on the house floor, that's what we do. we engage in the back and forth. if he can't handle that, particularly on an issue as important to our constituents as medicare, then he probably needs to reconsider his really ill advised position on medicare. >> obviously a lot of hard feelings there with the congressman. by the way, we invited him to come into "the situation room" today like you and his office told us he couldn't do it.

he didn't want to do it today. but he has an open invitation to come in if he wants to come in. >> the hard feelings are one way. i simply debated a policy issue on the house floor. he had spoken directly before me and i got a tirade in response out of the clear blue sky. it was really unfortunate. >> mitt romney is speaking out in california right now. let's go there and listen briefly and get your reaction. >> he would be able to keep unemployment below 8%. it has not been below 8% since. and for caliifornians, it's above 10%. it's two full percentage points higher than when he was elected president. now some years ago, just weeks after he became inauguratinged. he went on "the today show" and he said look, if i can't turn this economy around in three years, i'm looking at a one-term proposition. and i'm here to collect.

we have to make sure we focus our attention on getting americans back to work. >> he's arguably the front-runner right now for the republican nomination. you're the democratic party chair. is he the republican you fear the most? >> well, it's interesting that mitt romney is talking about job creation and unemployment when he was 47th of job creation in the country in massachusetts. wasn't even able to recover the jobs lost in 2001 recession in his state. coming from someone with an abysmal track record, he really shouldn't be questioning the president's record. each month, each quarter has created fifth sector jobs, millions at this point, when we were bleeding jobs before the president was inauguratinged in 2009. >> romney-obama run for the white house? >> i think it's really unclear. they have a collection of

interesting candidates on the other side. they're going to duke it out for the next few months and we'll see who emerges as their nominee. >> debbie wasserman-shultz, the chairman for the democratic national committee. the doctor for michele bachmann is weighing in on the migraine headaches that we now know she suffers from. could they put herred by for b white house at risk? and what happened after this leopard went on an attack. stay with us. [ male announcer ] 95% of all americans

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i'm wolf blitzer. more stories we're working on for our next hour. ahead, a closer look at the young life literally leaping to her husband's defense amidst a worsening tabloid scandal. as the clock ticks towards a deadline of a debt deal, some americans are flocking to capitol hill with an urgent message for congress. and exhausted and starving, the worst drought to hit somalia in half a century. you're in "the situation room." >> first, a report of million billions and billions of taxpayer dollars missing in afghanistan. we have the details. at a time of economic difficulty, they're looking to save money. all of a sudden millions are missing in afghanistan? what's going on? >> basically this shows that

about ten years in, the u.s. still only has limited visibility of what happens to billions of dollars once we send it to afghanistan. that makes it not only vulnerable to fraud, but in some cases even being diverted to insurgents who are fighting american troops. the u.s. spent about $70 billion, sending it to reconstruction and security projects in afghanistan. when afghan government officials leave the country, no one is checking how much money they have with them. and the audit shows that afghan government officials are refusing to put their money through these electronic currency counters. could the u.s. check it?

hard to do when u.s. officials are denied access to that part of the airport where the vip's are getting screened. and president hamid karzai has banned u.s. treasury officials from working with the afghan central bank. the obama administration has requested another $17 billion for afghanistan reconstruction next year. but even some democrats are running if we're throwing good money after bad. >> i was hopeful after doing a lot of oversights in iraq that he had learned a lot of lessons. this report said lessons had not been learned. the lack of cooperation in the afghanistan banking system is not helping us with our

oversight responsibility. if they're not willing to allow us to look over their shoulder as this money flows into the afghan economy, then we ought to say to them, maybe it's time we don't let that money flow. >> of one of the problems is they use what's called sort of informal financial institutions that operate sort of outside the law. they're not like official banks. one of the -- and you look at the audit, they found one case in which a u.s. contractor tried to send out about $3 billion, but it got tied up and they refused to disbeurse the money and there's no way to get that back. >> the inspector general's report, it's a shocking report that's going to put added pressure on the obama administration to start getting out of afghanistan even more quickly. especially since there's no evidence the afghan government

is doing what it needs to do to prevent these millions and millions of dollars coming out every day. some of that money going to terrorists and extremists who want to kill americans. shocking report. >> exactly, wolf. just one more thing. when you look at it, there's an agency that tracks this. and they even said 21 leads to afghan government officials on potential crimes. do you want to know how many of those leads the afghan attorney general's office followed up on? >> four. >> yeah, it's a shocking, shocking development. all right, thanks very much. chris lawrence at the pentagon. let's go to one of the more shocking allegations of the phone hacking scandal rocking rupert murdoch's media empire. there's new information that 9/11 families have been hacked. in britain today, the prime minister david cameron was forced to depend b himself in this exploding scandal during a

very contentious session of parliament. our senior international correspondent dan rivers is in london. >> wolf, from the committee rum where rupert murdoch was grilled to the main chamber in the house of commons, the phone hacking story continues. there was a debate in which the prime minister david cameron faced a barrage of questions about his hiring of andy

callson, tcallso coulson. >> the pattern of events suggests that the prime minister and those around him made every effort not to hear the facts. in the last week, we have become aware of five opportunities for the prime minister or his staff to have acted on specific information that would have surely led him to change his mind about mr. coulson, all were declined. >> but the prime minister insisted that he did everything he could. >> the ininquiry should consider not just the relationship between the press, police and politicians but their individual conduct, too. and we also made clear the inquiry should look not just at the press but at broadcasters and social media if there is any evidence that they' been

involved in criminal activities. >>th. >> reporter: but no one is suggesting this is over yet. the police have increased the number of offices on this investigation from 45 to 60 because of the sheer workload they' they're facing. wolf? >> thank very much. we'll stay on top of this story as well. also when we come back, a new attempt to try to deal with security at airports. brian todd has new information and you need to know when we come back. [ male announcer ] introducing the ultimate business phone --

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we're follow some of the top stories in "the situation room." >> it was revealed that major nadal hassan has released his lead lawyer. he's charged with killing 13 people and wounding 32 others in po ft. hood, texas, back in 2009. and a leopard reportedly wandered into a slum village in india and attacked six people. according to reports, people were forced to climb on roof tops as officers chased the animal. the leopard was shot and killed after several attempts to tranquilize it. unbelievable picture there.

and american airlines announcing a plan today to replace its fleet with hundreds of newly leased planes from boeing and air bus. its parent company, amr corp says it's ordered 460 single-aisle jets from from the manufacturers. >> rupert murdoch's wife is under atta the focus after a shaving cream attack. and we're going to tell you about changes that are in the works for body scanners right now. in cyber attacks. in financial transactions... in cyber attacks. on devices... in social interactions... and applications in the cloud. some companies are worried. some, not so much. thanks to a network that secures it all and knows what to keep in, and what to keep out. outsmart the threats.

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airport security screeners are starting to see less of passengers as of today. the transportation security administration is taking steps to do away with the most intrusive kinds of body scans. our brian todd went to the airport to take a closer look a into the changes that are now in the works. >> wolf, the tsa says it wants to improve the passenger experience while enhancing sdurt. so what it's come up with now is new software for its millimeter wave advanced imaging technol y technology. some of the old images we've seen that saw right through your clothes and saw pretty much every phase of your body with great detail is, which were very controversial, that's going to be eliminated now. right now they're going to be introducing a much more generic figure popping up on the screens here when people come through. they say it's going to be different call go ahead rhythms that will be able to detect the differences in the bodies of men and women. but it certainly won't show up on these screens. it's going to be very generic for both.

and will be able to still detect some anonlys there. it's going to be able to find nonmetallic devices you can't see, like the christmas day underwear bomber had. >> has it been done, have you installed this technology as a result of privacy, frankly body parts being seen too much? >> it's something we've been working on for quite a while, and we're now to the point where having done lab testing we're ready to deploy. >> there's no other wroom where tsa screeners are going to be looking at the images of the

bodies here. the computer is going to do all that. the tsa says they're going to put this out in three airports today, but they hope to have them in more than 40 airports across the country this year. democrats now invoking ronald reagan in the battle to raise the debt ceiling. plus michele bachmann's doctor now weighing in on her migraines. just as one of her challenges suggests she may not be up for the job, but to become president of the united states. our strategy session just ahead. somewhere in america, a city comes to life. it moves effortlessly, breathes easily. it flows with clean water. it makes its skyline greener and its population healthier. all to become the kind of city people want to live and work in.

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>> michele bachmann release's doctor released a statement under growing pressures about her health. he says when you do have a migraine, you're able to control it well with needed medication. it's not been necessary for you to take daily scheduled medications to manage this condition. let's bring in our chief medical

correspondent, dr. sanjay gupta. what do these drugs do? >> well, it's a very well known migraine medication. the theory is that some of the blood vessels in the brain, typically on one side of the head only are sort of in spasm. what it does is sort of stabilizes those blood vessels. it's something that you take when a headache is coming on. so you take it to treat the headaches. it does have some side effects. it can cause dizziness and nausea, kneeling sometimes that the room is spinning around you. the other medication is basically used to control nausea and vomiting, either from the migraine itself or the side effect from the first medication. so they're pretty typically used in combination, wolf. >> of could taking these drugs

and migraines actual ly debilitate her if she was president? >> they're common drugs. i suffer from migraines myself. i have some personal experience from these medications. the medications, the thing about them is they do have to be taken right as the headache is coming on. the thing about these migraine headaches is if you end up resorting to things like tylenol and ibuprofen, being in a darkened room, really not wanting bright lights to shine on you, that part can be debilitating. it works pretty well. the other thing, and i think the doctor made reference to this is there's another category of medicines you take daily to prevent the headaches in the first place.

>> millions and millions of people suffer from these migraines. thanks very much. >> thanks, wolf. you got it. >> we're getting in a statement from congressman wes allen's there was a report he apologized to debbie wassermann and calling her nasty things. she was on the show a little while ago and denied she got an apology. she went back to the office and he was quoted in the newspaper saying he apologized. a west spokesperson said there was no apology and we are waiting on an apology from her. alan west going on to say he is standing through a spokesman and standing by what he said he made a statement and he is moving forward. no apology from alan west. let's go to the session. joining us now our contributor

roland mardin and contributor and speech write, the editor of the forum.com. have you followed what he said. >> it seems the heat affected all of our temperatures. they need to calm it down. it's an intense environment and an intense moment. the country is on the brink of financial crisis and the members of congress need to keep the attention focused on the topic and not on themselves. >> that's getting out of control. out there on the blog, cnn.com/situation room. it is really tense. >> we invited alan west to come here into "the situation room" and make the case, but he declined the invitation. >> what's nuts to me is the congressman made all kinds of comments in about president

barack obama. i think he needs to accept the stature being a member of congress and conduct himself in a different way. you can criticize and say that somebody is wrong and use that kind of language is ridiculous. i hope someone in the house or the leadership said cool it. that's not how they want congress to act. look what they have come up with. the then president ronald reagan who wanted to get the debt ceiling raised. he said that. >> the congress consistently brings the government to the end of default. this brinkmanship threatens the holders of government bonds and those who rely on social security and veteran benefits.

interest rates would skyrocket. instability would occur in financial markets and the deficit would soar. the united states has a responsibility to meet obligations. it mean zees a well-earned reputation for reliability and credibility. two things that set us apart from much of the world. >> democrats found that tape and they are circulating it. they talk about the days of 1987. that was then, this is now. so many house republicans love ronald reagan. >> they bring me back to old times as a passionate reagan supporter. the democrats are the party of irresponsible children that is exactly what they are doing. one of the reasons why some of us get so angry about the issue now is the thing that made us republicans and conservatives was a commitment to things like

paying the bills and the bond holders. it's not the bleeding heart that you pay the bond it's the opposite. not just bond holders, but everybody. this is the debate not about future spending that must be controlled. it's about past spending and reagan was right. >> are there enough republicans in the house of representatives to get to 218 votes to avert a debt ceiling crisis? >> speaker boehner had the serious probability with his caucus. what jumps out at me is they frankly are in love with the myth of president reagan and not the reality of president ronald reagan. i hope tea partiers and house republicans will step back and say wait a minute. this is a patron saint. this is what he said. you had senator barack obama who voted against the debt ceiling as well. they are trying to hold on to

the ideology. >> the president's meeting with house republicans at the white house and the republican leadership and the speaker and majority leader. what's next in the efforts to avoid a huge debt crisis? as time runs out for both sides to come to a deal, some americans are making their voices heard. this is democracy in action. stay with us we will tell you what they are saying ♪ [ doug ] i got to figure this out. i want to focus on innovation. but my data is doubling. my servers are maxed out. i need to think about something else when i run. [ male announcer ] with efficient i.t. solutions from dell, doug can shift up to 50% of his company's technology spend from operating costs to innovation. so his company runs better, and so does doug.

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my money. my choice. my meineke. that is one reason why we are so deeply in debt.

i was in los angeles. what is it with you? why do you bash public employees? would you prefer we go to the route where they are enslaved to rich corporate masters? i am happy to hear they have great job security. if only the rest of us did. bud in virginia said i'm not sure if that is exaggerated, but it's difficult hiring full time employees, however i have seen firsthand if a more senior level employee gets themselves in deep enough they can be will be shown the door sometimes under the guides of early retirement. chris in florida, it's the same thing as it means in the mob. it's a job for life. they need to hire a consulting firm to weed out the keep effort and the wasteful jobs that are not needed, the federal government would shrink by about

60% lauren writes the first order of business is to perputuate itself. it can't do that without a reliable workforce. nobody gets fired. i need to get me one of them. if you want to read more, go to my blog. cnn.com/cafferty file. just like tv. >> not exactly. thanks very much. to our viewers, happening now, urgent efforts it avoid a debt disaster. live at the white house where president obama and the leadership are trying to break the impasse. a region gripped by famine and a catch 22 for the united states. saving lives could mean working with terrorists. when she leaped to her husband's defense, she also leaped into the headlines. the surprisings story of rupert murdoch's young life. how she went from gruelling poverty in china to unimaginable wealth.

we want to welcome our viewers in the united states. breaking headlines. all straight ahead. you are in "the situation room" >> leaders are back in search of a debt deal with president obama. they have been meeting for about 50 minutes and the urgency is growing by the hour. in 12 days, the united states will hit the debt limit, leaving the government unable to borrow and possibly unable to pay their bills. there competing plans to avert disaster, but right now none of them has the support to break the impasse. let's go to the chief white house correspondent. what's the latest? what's going on behind you? >> the president and some of his top aides are meeting with john boehner and eric kantor.

he is in there with the chief of staff and other top aides. it is about the nitty-gritty of the way forward as we get down to the wire. much to the frustration of some lawmakers, the president i'm told is pushing for a big deal and something more than raising the debt ceiling. leaders are pushing and moving forward oat back up plan, the mcconnell reid plan to raise the debt ceiling with the cuts. that doesn't have uniform support. it doesn't have support in the house of representatives. the question is, what can be done. what options are there to get the crucial votes in the house. there many people increasingly speaking out on capitol hill, saying at least to me on the phone that too many have come and gone to be asking what else can be added to the package at this late hour. they might say it's time to talk

about it. >> to push for the grand deal. >> time in a word. just time from may 15th, to june 23rd, vice president biden held the biden talks. a medium deal for deficit reduction and increasing revenue. those conversations ended and the president got involved from july 3rd to july 14th. the major players sat down to negotiate what they have been calling the big deal for deficit reduction that involves major entitlement and tax reform. the talks after five days of a daily conversation and hours of discussionsened without a deal. now we are facing in two days july 22nd, the white house's deadline for a meaningful deal

between the house and the senate and a final negotiation. we are on the precipice of that without coming closer to a final deal. that's why so many are saying this might be the time to say let's raise the debt ceiling. >> sorry the white house opening the door to a temporary hike in the debt ceiling after the president said he was not going for a measure? >> they allowed for just the littlest tiny bit of wiggle room. the press secretary did say this in the briefing. take a listen. >> they have an agreement and that's not acceptable. >> for both sides agree, we will support the measures needed to support the deals. >> immediately after they were quick and they clarify the short-term extension in a matter of days. if they come to a deal and need a few more days to vote on it.

this does not mean a 30 or 60 or 120 day debt short-term extension. not the kind of short-term extension and republicans in the house have talked about >> the chief white house correspondent and let's get to gloria who is there and they put a lot of praise for the gang of six proposal and democrats and republicans in the senate from the white house. not necessarily a lot of praise coming from republicans in the house of representatives >> the republicans in the house seem to be the whole. i went and spoke with the house budget chairman. paul ryan is very important to house republicans and it's his budget that passed almost unanimously with republicans earlier this year. he has become a lightning rod in the budget debate. i asked him about the gang of 6 and here's what he said.

>> it looks a lot like the paul ryan budget. in some ways it is. the virtue of the proposal is what they say -- [inaudible] . that put an idea or a plan on the table. at least somebody else is putting plans out there >> how would the house republicans look like they are not willing to deal. in other words -- >> they passed the budget and for two years. just yesterday we had a gain of 234 member of congress. they put the legislation on the floor and pass it. >> it's not going anywhere. >> if we gauge ourselves by

going anywhere or not, we will get nothing done. >> seems to me that you are not getting anything done anyway. the republicans are dug in. the largest saying we are going to get is a band-aid. maybe it will be a longer term band-aid >> i wouldn't treat it. eric kantor issued a statement saying elements of the gang of six were construct and he certainly didn't rule it out. he has been a hard liner in the negotiations. >> they like and paul ryan and eric kantor like the idea of tax reform. the problem with the gang of six proposal as far as they are concerned is an outline of ideas. you are not going to close loopholes until you do the tax reform and that takes a lot of time to legislate. >> but the whole notion of compromising right now assuming that there tax increases, the

question is are there enough moderate republicans and moderate democrats in the house of representatives and deal with entitlements. you have to deal with tax reforms. are there enough to get to the republicans in the house? >> they will have to see. the compromise this morning, why don't you do it. we have a tax increase coming up in 2013. that's when the bush tax cuts expire. that's a $1.5 trillion dollar tax increase. remember that tax increase was due to expire, but he said they are going to increase anyway we have given it the up. >> the rising star. the problems. >> it will work out. it will have much more on the battle. we will be joined this hour by the congressman from utah. what is he willing it do to

avoid the debt disaster. i will ask him. the republican presidentian hopeful. should ba michelle bachman help? a newly declared famine and a difficult decision for saving lives versus working with terrorists. you are in "the situation room"

>> jack cafferty is here with the cafferty file. >> michelle bachman is on a roll. the "wall street journal" poll found the minnesota congresswoman in second place. among candidates for president among mitt romney. the second poll that got her in second place. she came out on top in three of the four most recent polls with likely voters in the iowa caucuses they reported yesterday bachman suffers from debail tating migraine headaches they are bad enough she has to be taken to the hospital to be treated. three aides to bachman who spoke recalled incidents where she

couldn't work and missed house boats because of the migraines. another staffer told politico it's common to retreat to the private office and close the door and shut off the lights, sometimes for hours while wait figurar i headache to pass. on the campaign trail, bachman admitted she suffers from migraines and takes medication to treat them, but downplayed the condition and said it doesn't interfere with her work. the race is just getting started. today the bachman campaign released a note from her doctor acknowledging her migraines and saying otherwise her overall health is good. this news is bad timing. she has been under fire for gay rights groups and christian counsel issues. candidates on both sides of the aisle. some are able to overcome them. serious potentially debilitating health issues are a different

story. here's the question. should michelle bachman's health be an issue in the race for president? go to cnn.com/cafferty file and post comments on the blog. >> thanks very much, jack. escalating crisis reached the pipping point with the united nations declaring famine. officials say throw.7 million people are in direct peril. in neighboring kenya where the refugees are arriving by the hundreds. >> this is the entrance. the people are tired and exhaust and they haven't had food or water for a long time. they come here and while the lines don't look that big right now, it's already almost midday and these people just keep on screaming. they come in from somalia and they are walking and taking cars and spending up to $40.

i want to show you something over here. these people, these families have just come in. they don't have food with them and they pushed them oust somalia and they are in a desperate situation they are trying to get assistance. when people arrive and they registered, they have to live here. the camp with design for tens of thousands, now it's pushing a half million they are living in places like this that are not refugee areas it's community land where people are being forced and it's difficult to find water it's difficult to find food and after coming all the way from somalia and they end up at least for now.

it's really difficult and terrible conditions >> on the scene for us, there is a catch 22 in the united states and helping famine victims means working with an al qaeda affiliate. barbara star is working this part of the story for us. how difficult does this make it as far as humanitarian efforts are concerned? for u.s. aid agencies it is complicating everything. the obama administration making it clear it is not going to hurt it. >> nearly four million somalis are facing famine and in the middle of it all, the terrorist group with the al qaeda affiliate with air strikes and raids. he controls much of southern somalia said it will allow outside groups back in. it banned them two years ago calling them western spies and

crusaders and u.s. officials worry that trouble is ahead. >> neither the united states or others are prepared to pay bribes while it starves their own people. even while fighting in recent years they attacked to charge the group fees for its part to the treasury department bans aid that could benefit the terrorist groups and this is one of them. as a result, aid from the u.s. to somalia plummeted. aid organizations said they will help even with the physical attack for the legal risk of inadvertently returning aid to supporters. >> no coincidence that precise geographies labelled a famine and met the determination of famine, they limited the aid

workers. >> many think they are pledging to let aid in for two reasons. to keep military attacks and build support for itself. many worry aid workers are@dire risk. >> aid organizations that trust them or walk right into a civil war. >> now other countries have stepped up and that includes britain and the scandinavian countries and aid organizations from many islamic countries are front and center in trying to help in somalia. for all of them confronting the threat and trying to deal in getting aid into this very difficult situation really is reaching crisis proportions >> they want our viewers to know if you want to help and you can make a difference in east africa, visit our impact your world.

what a story. a check of the day's top stories then. is a tea party favorite breaking with fiscal conservatives with the debt ceiling. the congressman will join us live. stay with us you are in "the situation room"

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lisa sylvester is monitoring other top stories here including a budget breakthrough in a state that desperately needed one. >> minnesota is up and running again. governor mark dayton signed a two-year budget deal ending the longest state shut down in recent history. lawmakers have proved the $35.7

billion compromise in the early morning hours since july 1st. the capital and state parks have been closed in 2,000 employees have been laid off. those workers will be back on the job tomorrow. a grand jury jury has indicted for the murder and dismonopoliment of an 8-year-old boy. they found the remains in the freezer in a trash bin ever a boy disappeared and an autopsy revealed he died after being drugged, smothered and aaron's indictment includes counts including two counts of first degree felony murder. hurricane dora is a category three storm off the mexican coast with maximum sustained winds nearing 150 miles an hour. forecasters say dora could be a category 4 summer and will have-threatening rip currents on the southwestern beaches.

a surprise discovery in space. nasa astronomers found a fourth moon in pluto's orbit. it is named temporarily p 4. it's extremely small it captures the images from a distance of more than three billion miles. they ln to examine more closely when the horizon spacecraft flies by pluto. >> very cool. capitol hill is a crowded place these days we will tell you who is out in force making sure their voice is heard. a tea party favorite is breaking with other conservatives on the issues. jason will join me live in "the situation room" after this break

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virtually everyone involved agrees on the need as part of the solution and virtually everyone has something at stake. that sparked a huge lobbying frenzy on capitol hill. lisa sylvester is working for us and it is i think it's to say

that the lawmakers in the house could get an earful. >> wolf, we are on track to see huge spending cuts, but the question is what program will survive and what will be slashed. there is a lobbying frenzy involved with special interest groups doing everything they can to be heard. >> judy kato and edith powell is one of the most loving groups out there. they are seniors and activists and part of a group called the social security campaign they are walking the halls to deliver a message to lawmakers. the average social security retirement benefit of over $13,000 is the only thing that keeps some afloat. >> they are coming out and we are going to let them know this is not going to happen to them. >> we're can't let it. >> it must mean too many years. like i said, i will sit there

before i get it out. >> as congressional lawmakers try to work out a deal to slash the deficit, just about everything is on the table including social security cuts and lower costs of living adjustments. >> with billions. >> the senior's lobby has plenty of company for now. various interest groups ramp up their voices. howard marlo said he has never seen it before >> they are in wall street that is critical position in terms of the vaum of their investment. they are clearly the average citizen that does. we have people who are nonprofits and people in a variety of organizations. there is not a single american who does not have it in this particular issue.

>> they're are fighting to protect homeowner productions. they are lobbying and unions are pushing to keep medicaid and medicare on top. they have tax breaks and contractors are working overtime for the defense program. >> spending more. >> various groups fight to be spared cuts, activists like the club are wokking to shave off more from the deficit. behind closed doors, they work to hash out a deal where there will be winners and losers. they are optimistic and social security will be left alone. if it's not, they say they will remember come next year in november. >> the seniors lobby has a lot of cloud, but so do the unions in wall street and big oil. they spent millions in just the last three months on lobbying and we will take a look more at the numbers tomorrow. >> interesting stuff. thanks very much.

crowd up there. let's get the republican plan to pass the house of representatives call for example an amendment mandating a balanced budget. joe johns is working that part of the story. amending the constitution is all of our viewers know is a big step. >> in change the constitution to require a balanced budget has been tried many times. the idea never seems to get across the finish line. frankly this time it's not looking very promising at all. not spending more than you take in is common sense. go too far past your credit limit and you can't charge anymore. most states require balanced budgets and polls show 6-10 americans support a balanced budget amendment. why not put it in the u.s. constitution? >> the time has come to put into the national charter a requirement that this congress, this administration and future national governments live within the means of the american

people. >> the house republicans's plan allows the debt limit to go up only if both houses agree to the amendment. >> times are dire. the clock is ticking and we have to come up with a solution. this is a real plan. we cut spending in the 50 year and cap the expenses as a percentage. send it to a balanced budget. it's not theater. we are the only people who have a plan. >> a real plan? it's called make believe and the critics say they can make it harder to pay for a war. it's not likely to pass the senate. >> what are do we have to do for the long-term. >> that are leaves tea party-backed house freshman, the would be change agents from the last election without the biggest single change they demanded. >> what will you do presuming the senate does shoot it down? will you vote to increase the debt limit exclusive of that? >> you cannot increase without a type of spending control

measures. >> what about the choke of the government in an emergency. >> there emergency situations that we have to take care of. i don't think you are going to see us all of a sudden if an enemy attacks, we can't defend ourselves. >> cynthia is a second term congresswoman from wyoming who is not budging either. >> no. >> why not? >> because this is the opportunity to do with the american people sent us here to do. get the fiscal house in order. >> that means any deal may have to be done without them. over at the white house, even the president himself said sees balancing the budget as a good thing. not the amendment part. >> we don't need an amendment to do that. we need to do our jobs. >> if congress ever approved a clean balanced budget and senate to the states, mr. obama would not have a veto and a poll showing support for the amendment or right. democrats could have a fight.

the public thinks it makes sense wolf? >> thanks very much. more now with jason. you just saw it and he is joining us live from capitol hill. some of your conservative colleagues didn't vote for the legislation yesterday. they don't want to raise the debt limit. you are willing under certain circumstances to raise the nation's debt limit and go further into debt. why? >> i didn't get elected to raise the debt ceiling. that is part of the shared sacrifice. what i did come for is get elected to come change the way we do business. in a balanced budget amendment, it sends it to the state and let them have input. that is the heart of what we are asking here. >> ron paul is running for president and michelle bachman from minnesota running for president. they voted against the legislation. this is what michelle bachman said her explanation is and why she didn't like what you propose.

>> while i embrace the principa principals, this is a pro growth direction of those principals. i believe we have to repeal obama care because this will be devastating to our economy. we kent continue to do what we are doing. spend money we don't have. it's imperative that we not raise the debt ceiling. >> why is she wrong? >> i wish we could go told turkey. we borrow 40 cents out of every dollar we spend a reasonable plan is to put ourselves on a glide past and the amendment that takes to ten years to go through the ratification process. i understand and respect others who want to do it now. i worry that 40 sends out of every dollar, we cut it off right now. that's a very difficult thing to do. >> i understand your goal in all of this is not going to pass the senate and even if it did, they would veto the cap and balance

legislation. are you ready to go along with a compromise, namely with a gang of six in the senate has come up. >> we have a gang of 234 members. bipartisan, we have democrats who actually supported cap and balance. >> it's not going to pass the senate. >> we are going down a path and the clock is ticking. i'm not willing to give up and accept the premises that it was going to pass. if we don't try, we will never achieve. we need to do our job. the president never introduced anything. his budget never balances. it was presented to the united states senate and defeated 97-0. with such a short time frame, i think this is a reasonable plan. >> if it doesn't pass the senate, you have to do something to prevent the country from going into default. would you be open to the game gang of six proposal, the white house seems to like it and a

bunch of republicans are authors of it. would you be willing to go along with that to prevent economic disaster? >> no. we need to blitz that punt. we need to hear people across america saying block that punt we came to change the way we do business. i recognize that the clock is ticking. we have a plan. nobody else has an actual plan. the president has never presented an actual plan >> i understand you have a plan, but it's not going to pass. >> cbs, they vote on it. it's rejected and it does something to prevent the country from going into default. here's the poll. debt ceiling agreement should include 6% and should include spending cuts with what you want 28% only spending cuts increasing according to the polls, you are in the minority.

even with exxon-mobil and ge. we said in our budget, you would go along with tax increases. >> you have to lower the rates and going through the process of tax reform indicated earlier. it was a long and difficult process. there two things we are asking for. harry reid allowed the vote to come up. take a vote. a good clean vote what is he afraid of? he is so inpalettable. a moment of clarity and the president said he was not going to support a balanced budget. he has no interest in balancing the budget. assuming that your bill doesn't pass the senate and the gang of is not done in time. >> would he be willing to pass the legislation that allows the

debt ceiling to avert disaster? >> we had earlier weeks ago, the speaker brought up a bill to raise the debt ceiling with no spending cuts. it was defeated overwhelmingly. what i hope everybody realizes that they passed the budget. it has broad support out there and it's over in the senate and they need to act and they have been slow. they don't have a plan. they hear press conferences and releases and they have something that passed the house of representatives and the president divert this is disaster by supporting the amendment. the long time senator from utah for the nomination. what's among with o ren hatch? >> part of the reason we are here is they had the opportunity to vote no on debt increases. 16 times he voted in favor of it

and 10 times he allowed it. i have the greatest respect for this. i may or may not. >> 36 years that people are worried about. it's part of the problem they are dealing with. these guys didn't deal with the problem when is they had a chance >> i take it you hated when what ronald reagan did when he was president and beg them to raise the debt ceiling. you believe ronald reagan was wrong? >> i wish at some point on both sides of the aisle, a congress in the past would say no. we are paying more than $600 million a day and if interest rates go up, the number goes up. on both sides of the aisle, we didn't have the strength to say enough is enough and now we are trying to avert. >> ronald reagan and both president bushes were belong. you disagree with all three of the republican presidents? >> republicans and democrats, there is nobody exempt from this

blame. that's why we find ourselves in the precarious position we are in now. >> the republican congressman from utah, thanks very much. >> appreciate it. >> she captured the world's attention when she defended her husband ruper murdoch from a pie-wielding protester. who is wendy deng? that's coming up next. ♪ my only sunshine ♪ you makes me happy ♪ when skies are grey ♪ you'll never know, dear ♪ how much i love you ♪ please don't take my sunshine away ♪ [ male announcer ] as long as there are babies, they'll be chevy's to bring them home. ♪

the british prime minister went on the offensive as he accepted the scandal surrounding news of the world. they told members of parliament he never would have hired the director who has been arrested in the scandal. cameron defended himself against the suggestion he had inappropriate conversations with murdoch executives about the mogul's bid for satellite broadcaster . >> i never had one inappropriate conversation. let me be clear i complete plea took myself out of any decision making about

this bid. i had no in it when the announcements were going to be made >> i love the parliament. that comes a day after the dramatic appearance. the come interrupted by a protester who hit murdoch in the case with a pie. his wife jumped to her husband's defense, hitting the assailant. here to tell us more about the life before and after she marry the media mogul. she is say fascinating woman. >> she is. took took us all by surprise when she was so quick to spring into action to and for those who know her story, murdoch's toughness and resilience come as no surprise. when she lunged at the man with the shaving cream pie, she did more than fiercely protect her husband. she left witnesses surprise. millions of chinese cheer toing and those who know her story nodding. >> she tough. she took the cards that life

dealt her and played them to the filt. >> wendy deng played them as a teenager. >> i grew up in china very, very poor. >> she was an average student who excelled in volleyball. according to published reports, she befriended an american in china. they sponsored her for a student visa. according to press reports, they had an affair with the cousin and wendy deng married the man. she did stay married long enough to get a green card. some people see it as ruthless and others see it as something that happens. there many, many chinese women who would trade places with wendy in a heartbeat. >> while married to the divorced american and wendy deng had an affair with another man. she divorced, married the other

man and that ended in divorce. she earned an mba from yale and landed an internship with rupert murdoch's star tv. then she married the tycoon. they have two young daughters together. she had various positions in his company and produced a recent movie. through it all, the main ambition has been to protect the interest of our daughters >>. >> what about the contention and they were supposed to be broken up into four quarters and divide up. she made sure the children she had have been included in the settlement. that was one she fought tenaciously for >> with that, wendy deng murdoch secured her daughters a sizable chunk of news corp. stock.

we asked them for the story and a response to the various accounts of her personal and the conflicts with the murdoch children we have not figured it out. >> she has the mba from yale. any possibility she could emerge as the leader of this media empire. >> it's not likely that they have little or no ambition. they have roles or interests, but it's james murdoch's company to run. there have been tensions where the grown children are. she will have a fight on it. >> she about what? 42? >> should michelle bachman's health be an issue with the race for president? how many ways can you say hot? jeannie moos takes on the heat [ jerry ] i'm a grandfather, a retired teacher,

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let's get right back to jack for "the cafferty file." jack? >> the question this hour, wolf, is should michele bachmann's health be an issue in the race for president? paul writes from texas, although i'm not a huge fan of bachmann's, i don't see a real issue with her health. we need to look at jfk and fdr, they both had major health problems and most of us really didn't know any of the details until after they had both left us. isn't that what a vice president's for, to replace the president when and while too ill to give 100% to the position? lisa in connecticut writes, her history of treatment for migraines is simply a sign of a slow news day. this will be unlikely to affect the campaign. however, her candidacy and blunders give me a headache. gary in minnesota writes, bachmann's migraines are not an issue. her mental stability is the issue. i'm from minneapolis, minnesota, bachmann only sounds cogent in very short doses. beyond that as you will all see, she's quite off her rocker. i hope she's wildly successful

within her party, it will be great entertainment and an insurance policy for president obama. mike writes, of course, and she says it's from stress. what do you think the commander in chief's job would be? maybe her husband could pray the headaches away. david in florida writes, these things can be so severe as to be incapacitating for hours at a time. i used to have to take my wife to the hospital for treatment of migraines or leave work once or twice a month to stay with her because of her migraine headaches. j.k. writes from minnesota, all candidates for the presidency need to discloseny health issues they have, it doesn't matter who it is. they're asking the voters to trust them. the voters have the right to know if they're facically fe i to hold the job. brian in illinois writes, no, but it will be an issue. i'm a democrat so i can't believe i'm defending michele bachmann, her health will be an issue. the reality is we're a vain country, jack, we don't like ugly presidents, we don't like fat presidents, we don't like

old presidents and we don't like sick presidents. it's awn n unfortunate truth. and m.d. writes, not tonight, u.s. taxpayers. if you want to read more, go to caffertyfile@cnn.com. >> you'll be interested to know they wrapped up the meeting at the white house, the president, the republican leadership, we'll see what emerges. stay with cnn throughout the night to find out, and i know you and our viewers will, jack, thank you. for our north american viewers, john king will have much more at the top of the hour. and also the secretary of state, hillary clinton, delivers a message to india that china may not like, that's coming up on "john king, usa" right at the top of the hour. and just ahead, a sizzling report on a heat wave that's got millions of americans sweltering. every day, all around the world, energy is being produced to power our lives.

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or visit one of our local offices today, and we'll provide the coverage you need at the right price. liberty mutual auto insurance -- responsibility. what's your policy? nearly half the u.s. population is suffering through a stifling heat wave, and if the word stifling isn't descriptive enough for you, there are plenty of other words to drive home the point. here's cnn's jeanne moos. >> reporter: you know, it's really, really hot when the weather forecast reads like a romance novel. >> what a scorcher. >> sweltering. >> flirting with 100. >> you love the hot weather. >> i love it. >> but you are hot. >> reporter: but sometimes the word "hot" just doesn't generate

enough heat. >> pressure cooker. >> reporter: especially if you're a weatherman looking for new ways to say the same old thing. >> we really got some blow torching heat coming for tomorrow and tomorrow we're back on the burner. not on the back burner. we're back on the burner. oh, do the wheels come off the wagon. >> reporter: while all gasping for air like fish out of water, reporters are taking the temperature on the grass. >> 155 degrees. >> reporter: in the new york subway. >> the temperature reads 100 degrees. >> reporter: on a swing? >> 131 degrees. >> reporter: we're talking heat so oppressive that sometimes it's hard to spit out the words. >> the heat indices, the heat and humidity combined -- >> reporter: the current heat wave has been christened with a four letter word meaning an area of high pressure that's compressing hot, moist air beneath it. >> turn now to the heat dome. >> and when we say heat dome. >> the whole hot dome. >> this big dome. >> reporter: all this talk of domes --

conjures up visions of heat radiating ufos. >> a giant heat dome surrounded by a ring of fire. ♪ i fell into a burning ring of fire ♪ >> reporter: put some water on it! the heat wave is alive. >> the heat gobbling up most of the country like a virus. >> reporter: but if you want to see the newscasters mostly dres heat wave. >> welcome to naked news in brief. >> reporter: and even in brief they are covering -- >> what officials call a heat dome. >> reporter: but at least the heat dome left al roker feeling hot. >> when will it end? al will have some answer >> reporter: it's not every day al gets labeled too hot to handle. it brings out a wave of weather chefs. >> we put the egg in the pan out under the sun in an hour. this is the result, it's fried right to the pan. >> reporter: but the julia child of weather reporting is abc's matt gutmann cooking steaks. >> we'll see if we can cook it on the dashboard ofhi